Fair Value Measurements

3 Months Ended

Jun. 30, 2016

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

The fair values of the Company’s cash and cash equivalents, trade accounts receivable, inventories, prepaid expenses, income taxes receivable, other current assets, short-term borrowings, trade accounts payable, accrued payroll, other accrued expenses, income taxes payable and value added taxes payable approximate the carrying values due to the relatively short maturities of these assets.  The fair values of the Company’s long-term liabilities do not significantly differ from the carrying values.  The Company records the fair value of assets or liabilities associated with derivative instruments and hedging activities in other current assets or other accrued expenses, respectively, in the condensed consolidated balance sheets.

In 2010, the Company established a nonqualified deferred compensation program that permits a select group of management employees to defer earnings to a future date on a nonqualified basis.  For each plan year, on behalf of the Company, the Board of Directors may, but is not required to, contribute any amount it desires to any participant under this program.  The Company’s contribution will be determined by the Board annually. In March 2015, the Board approved a company contribution feature for future plan years beginning in calendar year 2016 and gave the authority to management to approve actual contributions. At June 30, 2016 and March 31, 2016, no payment was paid or pending.  The value of the deferred compensation is recognized based on the fair value of the participants’ accounts.  The Company has established a rabbi trust for the purpose of supporting the benefits payable under this program, with the assets invested in company-owned life insurance policies reported in other assets on the Company’s condensed consolidated balance sheets.  Deferred compensation of $3,468 and $308 is included in other accrued expenses and $3,066 and $5,993 is included in other long-term liabilities in the condensed consolidated balance sheets at June 30, 2016 and March 31, 2016, respectively.

The inputs used in measuring fair value are prioritized into the following fair value hierarchy:

• Level 1: Quoted prices in active markets for identical assets or liabilities.

• Level 2: Observable inputs other than quoted prices in active markets for identical assets and liabilities.

• Level 3: Unobservable inputs in which little or no market activity exists, therefore requiring the reporting entity to develop its own assumptions.

The assets and liabilities that are measured on a recurring basis at fair value are summarized as follows:

	Fair Value at June 30,			Fair Value Measurement Using
	2016			Level 1			Level 2			Level 3
Assets (liabilities) at fair value:
Nonqualified deferred compensation asset	$	6,259		$	6,259		$	—		$	—
Nonqualified deferred compensation liability	(6,534		)	(6,534		)	—			—
Designated derivatives asset	6,199			—			6,199			—
Designated derivatives liability	(1,029		)	—			(1,029		)	—
Non-designated derivatives assets	133			—			133			—
Contingent consideration for acquisition of business	(300		)	—			(300		)	—

	Fair Value at March 31,			Fair Value Measurement Using
	2016			Level 1			Level 2			Level 3
Assets (liabilities) at fair value:
Nonqualified deferred compensation asset	$	6,083		$	6,083		$	—		$	—
Nonqualified deferred compensation liability	(6,301		)	(6,301		)	—			—
Designated derivatives asset	2,903			—			2,903			—
Designated derivatives liability	(2,549		)	—			(2,549		)	—
Contingent consideration for acquisition of business	(20,000		)	—			—			(20,000		)

The Level 2 inputs consist of forward spot rates at the end of the applicable period. The contingent consideration amount at June 30, 2016 represents the remaining liability related to the purchase of the Hoka brand.

The fair value of the contingent consideration is based on subjective assumptions. 

Sanuk. During the three months ended June 30, 2016, the last contingent consideration payment attributable to the Sanuk brand acquisition was made in the amount of $19,700.

Hoka One One. The purchase price for the Hoka brand, acquired in September 2012, includes contingent consideration of up to $2,000, of which approximately $1,700 has been paid. At June 30, 2016, the final contingent consideration payment of approximately $300 is pending final disbursement.